The World’s Best Places to Retire in 2014

First-World cities with every modern convenience, beachfront hideaways, medieval towns, tropical islands, temperate mountain valleys… You can chose your favorite climate, your preferred lifestyle…the place you feel most at home…because the world’s best retirement havens have it all… and for pennies on the dollar, too.

In this, our annual Global Retirement Index 2014, we profile the best destinations for good-value living around the world today.

We consider not only a wealth of statistics, but—critically—more than three decades of expertise and current insights from our network of correspondents.

Our experts—expats themselves—live in the places we rank and scout all over their adopted countries on your behalf.

Each year we ask them to respond to a long list of questions designed to get their fresh views on old places, and expert opinions on new ones. (For more on how we research our Index see below.) All the countries at the top of our Index were in close contention for the number one spot. But our winner—Panama—snags first place by a hair. Along with the world’s best range of retiree benefits, Panama has introduced new visas, which make it easier to gain residence there, and made major advances in infrastructure.

This means it simply out scores last year’s winner, Ecuador. Because of Spain’s economic crisis you’ll find more attractive opportunities there than ever to embrace an affordable life in the Old World, lifting that country into fifth place in our Index this year.

But whatever you see on our leader board below, just remember, we measure here only the very best havens. So the country last on our list—newcomer to the Index Cambodia—is still one of the best in the world.

In each of these destinations, you’ll find thousands of folks who have already found their dream retirements. You can too, and this 2014 Retirement Index is designed to get you started. It covers all the bases, revealing a wealth of choice when it comes to a comfortable life overseas… Let’s look at what the top five retirement havens in the world have to offer you…

Panama—Convenient, Easy and Affordable

Panama’s allure lies in a rare combination of value and variety. Plenty of places in the world offer one or the other. But how many offer both?

When it comes to attractive retirement destinations, the list is short and Panama is at the top. It’s the only country in Central America with a true First World city. But unlike most South American capitals, Panama City is only two-and a-half hours by plane from Miami. (And let’s not forget that, unlike some places closer to the U.S. border, Panama is hurricane free).

Nearly everything about Panama is convenient, particularly if you’re coming from North America. The currency is the dollar, English is widely understood, and the international community is large and welcoming. Even the littlest things are easy…your U.S. appliances will work here, no converters needed. And you can find anything you need, from gourmet ingredients to popular clothing brands.

Plus, no matter what you like to do… loll on the beach, golf a championship green, hike the highlands, join special interest clubs…you’ll be busy here. Unless, of course, you choose not to be. Spend as little—or as much—as you like. A good lifestyle is very affordable. Just be aware that it offers more temptation and opportunity to spend than some other overseas havens.

So if all these things are true (and have been for many years), what’s so special about Panama today? At the top of the list are its welcoming immigration policies.

Last year, two new residence programs made it easier than ever to move to Panama.

Quite a feat, since Panama has always been accessible in that regard. The Pensionado or pensioner residence program—which helped put Panama on the map as a retirement destination in the first place—is the primary reason. For anyone with a government or corporate pension, residence is almost a given. That’s regardless of age. The main requirement is simple: your pension must be at least $1,000 a month…and even that rule has its exception.

Of course, there are plenty of people who don’t have pensions. That’s where the new visas come into play. The first, nicknamed the “Friends of Panama” program, offers residence to members of over 40 countries…among them the U.S., Canada, and the UK. Geared toward professionals and entrepreneurs, the program’s straightforward requirements include a local bank account of at least $5,000. Applicants must also buy real estate, open a business, or get a job in Panama.

If your country of citizenship isn’t featured, you may be able to qualify for the new Professional Residence Permit. Also created in 2012, this program is a good option for anyone wanting to work in Panama. You must have a university education and steer clear of professions reserved for Panamanian nationals, such as the practice of law.

There’s one more reason Panama is even more alluring of late. The tiny country is in the midst of its most ambitious infrastructure overhaul ever. Panama has always been known for its above-average infrastructure. But the current administration upped the ante in ways never before seen.

Panama City is now the only city in Central America with a metro line. The transit system was barely able to cope with the city’s growth…and the thousands of shiny new cars joining the hustle-bustle every month. But now new buses, roads, traffic lights, overpasses, pedestrian bridges and more are helping speed things along.

Though transit (including the expanding Panama Canal) has been a major focus, infrastructure is excellent across the board. Panama is top-ranking in the region for technology and Internet coverage, reliable public transport, and clean drinking water. It also boasts consistent stability—in business, banking, and politics. And so the country that ruled the roost that is the Global Retirement Index for seven consecutive years is back at number one.